Explain balanced of trade & its …

Features of Balance of Trade:

Various features of balance of trade have been explained below:

1. Exports and Imports:The elements of the balance of trade are exports and imports. Export of goods means movement of goods from domestic country to foreign country. The vis-a-vis is known as Imports.

2. Visible Goods:Balance of trade constitutes imports and exports of goods. The important features of the goods are that it must be visible, have physical structure, size, shape and form. The goods must be seen and touched, counted, measured and weighed.

3. Material Goods:Goods constitute our imports and exports must be material. It means that non- material goods and services will not constitute imports and exports.

Types of Balance of Trade:

Figure 2.2. Below illustrates various types of Balance of Trade:

1. Favourable Balance of Trade:

The situation, wherein country’s exports exceed imports is a situation of favourable or surplus balance of trade.

2. Unfavourable/Deficit Balance of Trade:

Excess of total value of goods, imported over the total value of goods exported is termed as unfavourable or adverse or deficit balance of trade.

It may also be expressed as under:

3. Equilibrium in Balance of Trade:

Equality between the total value of goods exported and total value of goods imported is termed as equilibrium in balance of trade.

It may also be expressed as under: